Image courtesy flirtcr, flickr creative commons


Leaders of North Carolina’s accountable care organizations weigh in on how the new model of organizing patient care is changing the way they do business.

Interviews by Rose Hoban & Hyun Namkoong

After months of deliberation, state Department of Health and Human Services leaders announced a plan to  transform the delivery of health care in North Carolina’s Medicaid program. The plan calls for physicians, hospitals, clinics, therapists and other health care providers to organize themselves into accountable care organizations to provide beneficiaries with care.

Health economists have long argued that the current physician fee-for-service system incentivizes health care providers to do lots of “stuff” to patients – lab tests, procedures, extra visits – with little incentive to coordinate care among the different specialists a patient might see.

Leslie McKinney.
Leslie McKinney, MD. Image courtesy WakeMed Physician Practices

But under an accountable care organization blueprint, health care providers bear financial accountability for the quality of care and how well patients do. If a patient is readmitted into the hospital frequently or ends up in the emergency department repeatedly, the doctors who control that patient’s care lose money. But if a patient remains healthy, stays out of the hospital, expresses satisfaction with his or her care, and the ACO meets quality benchmarks, the organization shares in the savings.

More than a dozen ACOs are already in operation in North Carolina and several have already received incentives for quality and cost savings.

North Carolina Health News spoke to leaders from two North Carolina ACOs and asked them about their experiences:

NCHN: Why form an ACO?

John Rubino, vice president, WakeMed Key Community Care (Raleigh): Most of what’s happening in health care is market driven. You can’t have a system that spends two times as much money as other industrialized countries and comes out 34th in the world in health statistics. You can’t compete. So all the payers, insurers, employers and government are saying we’re spending too much and not getting the quality we want. That’s why an ACO. It’s value driven and the value is defined by giving a good product at a lower cost.

Kelly Schaudt, chief operating officer, Physicians Healthcare Collaborative (Wilmington): We are able to have a [more complete] picture of patients because we not only have their information in the medical records but also we are able to receive from [the federal Centers for Medicare and Medicaid Services] claims data that allows us to see the true costs associated with their health care.

Leslie McKinney, president, WakeMed Key Community Care: We all believe there may be some real efficiencies when you can combine very strong primary-care practitioners focused on providing high quality with a health system that has same objectives.

John Rubino, MD.
John Rubino, MD. Image courtesy Raleigh Medical Group

NCHN: Who are you caring for?

Rubino: The Medicare ACO that WakeMed Key Community Care started working with in January 2014 has about 30,000 covered Medicare lives. We have about 15,000 other commercial lives, coming from WakeMed employees. All this will go into one basket, and we will have another 30,000.

Schaudt: We began participating Jan. 1, 2013 in a Medicare shared savings program. We also have a commercial ACO with Blue Cross and Blue Shield of North Carolina. We’re wholly owned by Wilmington Health and all of the physicians participating in the ACO are Wilmington Health physicians.

NCHN: How long have you been in operation?

McKinney: Key started in April 2012. No one has been doing it for a long time.

Schaudt: We began participating in January 2013.

NCHN: What are you doing differently?

Schaudt: We’ve got a hotline for emergency department physicians underway. If they saw one of our patients prior to accountable care, they would have just admitted him to the hospital. But now, if it’s a borderline case, they can call and leave a message on our hotline, get information. Our primary-care physicians have committed that if they receive a message about one of their patients being discharged from the ER, then they will see the patient within 24 to 48 hours for appropriate follow-up care.

McKinney: Let me tell you a patient story: We had a person who’d developed diabetes to the point where they needed insulin. So our nurse care coordinator went to see the person at his home and saw the person was drinking lots of Kool-Aid. She watched him dump sugar into the Kool-Aid and was able to identify what was driving his sugars up. Now he’s not on insulin.

That one visit – there was the answer staring at us!

Kelly Schaudt.
Kelly Schaudt. Image courtesy Physicians Healthcare Collaborative

Schaudt: Another initiative we have underway, when we discharge patients from the hospital, with [chronic obstructive pulmonary disease] or congestive heart failure or complicated diabetes, we have a nurse practitioner who is a “transitions of care” extender. She goes and visits patients in the home and makes sure patients understand instructions, checks on medication adherence, helps get them to the one-week follow-up appointment and makes sure they don’t get readmitted within 30 days of hospital discharge.

Rubino: What we’ll have with care coordinators is they’ll be embedded in certain physician groups. Raleigh will have a care coordinator who will interact with doctors and there’ll be a much tighter relationship between the doctor and the care coordinator to help the patient than traditional home health.

The insurance companies try this all the time with various programs to call patients houses to check on how they’re doing, but it’s never really worked, in part because the patients are suspicious of the insurers.

NCHN: Some of this sounds like the kind of things done in managed care.

Rubino: Well, a lot of the care is managed these days. But number one, the dollars saved stay in North Carolina, which is one huge difference. And the docs will have more control. In managed care, when insurance companies do it from a distance, it’s much more painful to the doctors in terms of increased overhead, prior authorization for everything and not a lot of gain coming back to the people doing the work.

NCHN: So can you say it’s really working? Is it possible to make money and provide better quality?

Rubino:  It certainly is a process before you see the savings. You get one piece done and then another and another; it’s cumulative. I think there are good examples of people doing this and saving money. I can tell you the folks in New Bern [at Coastal Carolina Quality Care] have done well. They were early on to become a Medicare ACO; they got funding from the government to hire care coordinators. They saw their bed days in hospitals went down and emergency department visits went down. They did pretty good for the first year out; they managed some problems, logistical issues.

McKinney: You can’t assume one model for an ACO will work for everything. You have to think about a population and look around to see what works well. There will be different models for behavioral health, for example.

NCHN: What about you folks?

Rubino: [I]n the first year of our contract … we didn’t do that much and still beat the market by a substantial amount. We have more room to get better. I think it’ll ultimately work.

Schaudt: We are in the process of reporting first-year quality data to [the Centers for Medicare and Medicaid Services]. We’re giving them data on 33 quality measures; we’re required to report it. Then that establishes our benchmarks for quality and CMS will set targets for the next year.

NCHN: Final thoughts?

Schaudt: As we move forward, we are going to be expected to share data, to demonstrate quality. As we talk about cost, we expect that cost is something that is going to be transparent. I think by our participating in an ACO, it is helping us prepare for the future of health care. We are prepared to be transparent with our information, our quality data is fully transparent and I just see that continuing to evolve.

Rubino: We have to change our way of thinking, switching more to thinking about how to keep people healthy versus just treating them when they’re sick. We’re just used to patients coming to us when they’re sick and there’s a problem. Now we’re building a system to follow patients and encourage them to do the right things.

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